New product launch strategy for network effects products

In recent years, there has been a growing interest in the link between launch strategy decisions and new product performance. Much of that research focuses on investigating successful launch strategies for innovative, high-tech-nology products. With the rapid growth of information technology as one high-technology sector, in certain industries,network effects occur, which change the competitive game. The existing literature offers little decisionmaking guidance to managers on how to successfully introduce a product that exhibits network effects. The authors discuss the influence of network effects on the dynamics of market competition and on consumers' consumption behaviors. They argue that, because of these changes, the priority of particular performance objectives and the impact of specific launch strategies differ for products that exhibit network effects from what current wisdom and empirical results prescribe. These ideas are formalized in a conceptual framework and a series of research propositions. Yikuan Lee is an assistant professor in the International Business Department at San Francisco State University (SFSU). Before joining SFSU, she held a visiting position in the Marketing & Supply Chain Department at Michigan State University. Her research interests include commercialization of innovative products, network effects, new product development, and strategic marketing management in high-technology arenas. Much of her work focuses on how firms integrate marketing and technology competences. She received the Best Dissertation Award and the Best Paper Award at the 1999 Product Development and Management Association (PDMA) International Conference. She also won the 2000 Edl and Edith Darger Dissertation Prize in Management in recognition of outstanding academic achievement. She has published in theJournal of Product Innovation Management. Gina Colarelli O'Connor is an assistant professor in the Lally School of Management and Technology at Rensselaer Polytechnic Institute. Her fields of interest include new product development, radical innovation, and strategic marketing management in high-technology arenas. The majority of her research efforts forcus on how firms link advanced technology development to market opportunities. She has articles published in numerous academic journals, including theJournal of Product Innovation Management, Organization Science, California Management Review, Academy of Management Executive, theJournal of Strategic Marketing, theEuropean Journal of Marketing, Psychology and Marketing, among others, and is coauthor of the bookRadical Innovation, How Mature Firms Can Outsmart Upstarts (HBS Press, 2000).